Some cryptocurrency investors have taken to earning interest on their holdings during this volatile market.

They are now using a practice called staking or forging to earn some extra coins while they wait for a bull market to return.

Advertisement

This can be done via a consensus algorithm called Proof of Stake (PoS) which could provide handsome returns to investors, reports Bloomberg.

What Is Proof of Stake (Pos)?

Some cryptocurrencies like Bitcoinand Ethereum follow a consensus algorithm called Proof of Work (PoW) where miners have to mine the next block first to win the block rewards.

However, some digital currencies use a different algorithm called Proof of Stake (PoS) where they can stake their coins or keep them in dedicated digital wallets to help validate transactions on a block.

They receive rewards for the same, and the returns of this process can vary from 5% to 150%, depending on the coin and the number of them held.

As crypto prices have fallen dramatically and there is no sign of a new bullish market yet, staking is helping some investors endure the bearish conditions in the meantime.

Note that many coins have lost as much as 90 percent of their value in the past year.

RELATED ARTICLES

MORE FROM OUR PARTNERS

[blokt] is a leading independent blockchain news outlet that maintains the highest possible professional and ethical journalistic standards. Journalists are required to meet our editorial policies and guidelines.